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Loss making season hit banks : The Standard

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Wilfred Kiboro, Family Bank Board Chairman (Middle)

NAIROBI, KENYA: Banks need a turnaround plan as small lenders posts losses and decline in profits amid reduced loans to customers under the rate cap regime.

National Bank made Sh7 million net profits in the 12 months to December last year a 98 per cent fall from Sh410 million in 2017.
Loans to customers declined from Sh57 billion to Sh47 billion out of which Sh31 billion was in default.
Another state lander, Consolidated Bank sunk further into losses posting Sh540 million loss in 2018 down from a loss of Sh334 million in 2017.

SEE ALSO :Shelter Afrique, HF Sh900m housing project ready

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Development bank also owned by the government sunk from Sh9 million profit in 2017 to Sh5.8 million loss.
Housing Finance posted a net loss of Sh598 million from a profit of Sh126 million last year after loans to customers declined from Sh49 billion to Sh43 billion.
On the flip side, Family Bank which had posted a loss of Sh1 billion in 2017 rebounded to a profit of Sh244 million in 2018 on a turnaround strategy that saw it push lending from Sh43 billion to Sh44 billion mainly over their mobile application.
“Last year, the Bank invested heavily in revamping our PesaPap mobile application and greatly enhanced the features as well as the customer journey and experience. We have advanced over Ksh1.2Bn through the App since the launch of the mobile lending service in July 2018,” said Family Bank Board Chairman, Wilfred Kiboro.
HF says it has embarked on an aggressive business transformation strategy to turn around performance and accelerate growth to profitability by end of 2019.
The Group CEO, Robert Kibaara said HF Whizz, the digital banking business which was launched in July 2018 the lender has acquired 550,000 new customers, reflecting a 600 per cent jump in customer numbers; disbursed over 1,000 loans per day with the number of disbursements growing daily and registered transactions exceeding Sh2.5 billion.
The Government has been meaning to merge the three falling banks as a turnaround plan but recent developments indicate they will brave the tough environment with different strategies.
Development Bank of Kenya will be merged with Kenya Industrial Estates, Uwezo Fund, Youth Enterprise Development Fund, Women Enterprise Development Fund, and IDB Capital Limited.
Consolidated Bank wants a strategic investor to pump in Sh3.5 billion and take a controlling position in the bank while National Bank recovery strategy is yet to be established.

Housing FinanceNational BankConsolidated Bank



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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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